“We came off the settlement and celebrated,” said CEO Glen Dall, who joined the company from a competitor in 2009 and was named CEO in August. “And when we woke, we realized that our business strategy had been the all-consuming lawsuit.”

In fact, the settlement amount was a whopping seven times depressed 2011 net revenue of $17 million. The company had taken its eye off the business.

Insignia used most of the settlement money to pay $30 million in taxes, $30 million in lawyer bills, a special dividend to shareholders of about $30 million and about $12 million to plug six quarters of operating losses in 2011-12.

That left about $22 million in cash by early 2012 and a fervent need to shore up its eroding business.

Brooklyn Park-based Insignia lost huge Kroger Co. toward the end of the litigation. That was 25 percent of Insignia’s business.

Sales dropped 43 percent in 2011. Management restructured and cut employees by more than a third to 65 in a morale-killing move.

The 23-year-old company refocused around “POPS, ” a color-bursting, in-store price advertising program that drives incremental, profitable sales, even though the Gatorade or Miracle Whip or Crystal Farms cheese slices often are not on sale. It works for many packaged foods companies and many retailers.

Insignia also doubled the number of salespeople to 13 calling on food companies and retail accounts.

Drill, who hired Dall from competitor Valassis as chief operating officer in 2009, made $1.6 million in bonuses over the last two years related to the News America settlement. The board awarded Dall no bonus atop his $257,000 salary in 2012, a year of layoffs and restructuring.

Results have improved markedly since 2012. Insignia, over the last four fiscal quarters, recorded operating earnings of $3 million on revenue of $25 million, including its highest sales quarter since 2010.

The company’s stock price, which shot to $7 per share in 2011 at the News America settlement, fell to $1.50 per share in 2012, amid the layoffs and restructuring. It rose to $3 per share earlier this month, as more customers signed up and results improved. Shares closed Friday at $2.75, down 2 percent for the day.

Insignia is increasing employment from 65 to 75 this year. Its stock-option program has been expanded to all employees. That sounds fair for the survivors who are generating more profitable sales for shareholders.

Still, will Insignia, despite the improved performance, remain an independent public company? Its market value is less than $40 million, tiny for a public company. And thinly traded stocks that trade for less than $5 generally are eschewed by institutional owners who want liquidity, the ability to get in and out without driving huge price gyrations.

‘Back on track’

Bruce Hendry, the veteran Twin Cities value investor, owns 1.14 million shares, or 8.3 percent of the company. He invested during the lawsuit and says he’s probably at about break-even.

“They settled the lawsuit and then everything fell apart,” Hendry said. “Now they are back on track with new management.

“I would hope … that they would consider taking the company private. They’ve got $22 million in the bank. The cost of being public, with all the new regulations, doesn’t make sense for a company this size. I would say I’m excited about the prospects … and then maybe sell the company in the next three to five years. They have a unique laser technology. They also could use some more business.”

Insignia management declines to speculate about its ownership future.

Dall, though, was happy last week to show off the company’s automated laser die-cut production technology, a $2 million software-driven equipment assembly, customized for Insignia so that operators can automatically make and package customized promotions for each of its 22,000-plus retailers without human hands. It’s only two years old.

“We’ve reinvested in the company,” Dall said. “The recent results speak for themselves. We’re delivering on a vision for the next chapter.”

Under the 2011 settlement, New York-based News America paid Insignia $125 million and Insignia paid $4 million in return for a 10-year business arrangement that gives Insignia access to some News America clients. In its lawsuit, Insignia alleged that News America violated U.S. antitrust law and laws that prohibit unfair disparagement of competitors. Essentially, it charged the Murdoch operation with trying to bully it out of business. It sued for $250 million in damages and settled for $125 million.

Note: This column normally would appear in this coming Monday’s Star Trib­une. The column will return to that Monday schedule on Sept. 30.

Neal St. Anthony has been a business columnist and reporter for the Star Tribune for 30 years. He also has worked in financial communications for two publicly held companies. Follow @StAnthonyStrib